Question

Sarasota Corporation’s management wants to maintain a minimum monthly cash balance of $10,400. At the beginning of September, the cash balance is $15,951, expected cash receipts for September are $126,360, and cash disbursements are expected to be $149,500. How much cash, if any, must Sarasota borrow to maintain the desired minimum monthly balance? Determine your answer by using the basic form of the cash budg

Answer 1

$17,589

Step-by-step explanation:

The computation of the borrowed amount is shown below:

= Beginning cash balance + expected cash receipts - expected cash disbursements - minimum monthly cash balance

= $15,951 + $126,360 - $149,500 - $10,400

= $17,589

Simply we add the expected cash receipts and less the expected cash disbursements and minimum monthly cash balance to the beginning cash balance so that accurate value can come.